Japan’s METI agrees to cooperate on new ADNOC partnership strategy

Japan’s Minister of Economy, Trade and Industry Hiroshige Seko and Abu Dhabi National Oil Company CEO Sultan al-JaberJapan’s Minister of Economy, Trade and Industry Hiroshige Seko and Abu Dhabi National Oil Company CEO Sultan al-Jaber agreed Thursday to cooperate on ADNOC’s recently announced new strategy, a METI official said.

During the half hour meeting in Tokyo, Seko and Al-Jaber, who is also the UAE’s minister of state, agreed to wide-ranging cooperation on ADNOC’s new strategy announced on July 10, the official said.

ADNOC’s new partnership strategy outlined criteria that included the ability to “secure better access to the world’s fastest-growing target markets for ADNOC’s products.”

ADNOC also included a willingness to contribute technical expertise and jointly develop new technologies, as well as potential for joint strategic investments in the value chain.

Speaking at the beginning of the bilateral meeting, Al-Jaber said: “We have both, Japan and the UAE, worked very hard at establishing a very robust, strong foundation for a long-term, strategic partnership.”

OFFSHORE CONCESSIONS NOT DISCUSSED

Seko’s latest meeting with Al-Jaber came just a week after Japanese State Minister of Economy, Trade and Industry, Yosuke Takagi, visited Abu Dhabi to meet officials including UAE energy minister Suhail al-Mazrouei, Al-Jaber and paying a courtesy visit to Crown Prince Mohammad bin Nahyan.

Touching on Takagi’s meeting with Al-Jaber, Seko said at the beginning of the meeting that he had been told Takagi and Al-Jaber had “detailed discussions.”

During his visit there, Takagi pressed the case for Abu Dhabi to extend the interests of Japanese companies in the emirate’s offshore oil concessions, over 60% of which are due to expire in March 2018. He also discussed ADNOC’s new growth strategy and deepening bilateral cooperation in the upstream, midstream, downstream oil and gas sectors.

The UAE has become a top priority for Japan as it seeks to secure its future energy supplies because of the looming expiry.

Highlighting this, Seko’s latest meeting Thursday was also METI’s eighth meeting with Al-Jaber at the minister and state minister-level since May 2016. However, the METI official said that Seko and Al-Jaber did not discuss the expiring offshore oil concessions Thursday.

METI is pushing for Japanese companies, such as Inpex, to retain their stakes beyond the expiry date. Inpex currently has a 12% stake in offshore Adma concession, which it is eager to keep, through its wholly owned subsidiary, Japan Oil Development Co, or Jodco.

ADNOC is already in advanced discussions with a number of international oil companies for its key offshore Adco oil concession, operated by the Abu Dhabi Marine Operating Co., which expires in March 2018. The current shareholders are BP (14.67%), Total (13.33%) and Jodco (12%). ADNOC holds the controlling 60% stake.

Abu Dhabi has current production capacity of just over 3 million b/d and has long-held plans to increase that to 3.5 million b/d and longer-term plans for 4 million b/d. These will hinge on new additional capacity coming from the main offshore concessions.
Source: Platts